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The blockchain is the greatest technological innovation of our time. It contributed to the massive wave of change and disruption in the financial industry. While blockchain has almost reached the mainstream in terms of recognition, acceptance of the system is still hindered by arguments of how it is best applied.

The debate between public and private blockchains has been ongoing for some time. Both sides support differing and equally valid opinions. The earlier personas of these two camps are as follows;

Earlier Supporters of Public Blockchains – The fans of public blockchains tend to have more liberal ideals, and are market driven capitalists. The earlier Bitcoin investors are the best examples of public blockchain supporters.

Earlier Supporters of Private Blockchains – The ones that support the private blockchains tend to be the ones who support the incumbents where a consortium is formed in order to form a rather exclusive network. R3 is a good example of this.

As the ecosystem grows, the public blockchain camp starts to see the need for private blockchain in some instances and vice versa. The consensus public blockchain camp argued that volatility will dissipate once there is more volume. I disagreed from the beginning as the premise was already incorrect. The stock market has been in existence for over 300 years since the days of the tulip mania. Crisis happens over and over again, yet the volatility does not dissipate with size. With the same deductions, this is the same for public blockchains. We cannot expect volatility to go down due to increased listing assets in the open market.

The private blockchain camp also saw the need for public blockchains. Unless the private blockchain decides to stay private and not scale, there is a need for public blockchain integration in order to scale, or communicate with other blockchains.

Taking sides and comparing public and private blockchain is not advantageous nor constructive. It is preventing us from taking the most of blockchain’s potentials. “Both public and private blockchains have their roles to play to serve the underserved.” – Anson Zeall. How does one compare two things that are distinct from each other? It’s like arguing what’s better between an apple and an orange.

So maybe they should co-exist somehow?

Public Vs Private – a better way to look at it

Having said the above where both the public and private blockchain camps are maturing, the ecosystem should be thinking from a use case perspective. That is, we look at a certain problem we have at hand, and then decide if a pure public, or a 100% private, or a hybrid solution would solve the problem. Thus, by having a use case based approach, public and private blockchains can exist alongside each other.

CoinPip is a money transfer service for businesses, helping businesses fulfil their global invoices and payroll needs. CoinPip leverages on different cryptocurrencies as the rails for transfers. For example, if a client requires funds to be sent from Singapore to Indonesia, the transfer will look like this:

Pro: Public blockchains connect the world together due to its open source and inclusive nature. One can easily launch a marketplace and start having people trading a normal currency with bitcoins (for example). At the same time, public blockchains allow CoinPip to execute transfers internationally without having to ask permission from the existing banking networks.

Con: As a store of value, public blockchains can be very volatile. Clients of CoinPip are leveraging on the competitive rates and speed we can give them. And not a single client wants to keep their funds in cryptocurrencies due to its volatility. This is where CoinPip comes in, as CoinPip takes on the volatility risk, but we harness the speed of the transfers and pass only the benefits to our customers.

CoinPip’s customer base – the 20%, unfortunately

Most of CoinPip’s customers have bank accounts as they are operating businesses. So, those that do not have a bank account, CoinPip cannot serve them. CoinPip substitutes the existing international funds transfer operations, and the role of the banks is to perform a domestic transfer from our partners to our clients.

Public-private blockchain: An Integrated Solution

Having a decentralized hybrid solution will not only expand CoinPip’s customer scope, but can also improve the efficiency of compliance, where a whole compliant tracking solution end-to-end is in place. CoinPip can handle all the exchange risks in the public blockchain markets, and at the same time, can convert the public tokens to private tokens immediately for the unbanked customers. And the private tokens are fixed with the national currency of the sender/recipient, which gives comfort to everyone

It is only by looking at the big picture that solutions are realized. Both public and private blockchains have distinct roles to play to serve the underserved. The financial inclusion movement has started, and where banks have failed, blockchain will resolve. Taking the best features of both public and private blockchains, and combining it into one powerful tool can simplify a lot of things – speed up processes, save money, and make things easier for everybody.

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